WPP shares slump as revenue declines and headcount drops by 6000

WPP’s share price plunged as its 2024 revenue growth came in at the bottom end of its forecast—with Q4 being the worst quarter of the year—and it warned the decline could be worse in 2025.

Revenues less pass-through costs fell 1% to £11.4 billion ($14.4 billion) in 2024, with Q4 down 2.3%, and it expects revenues to be down between zero and 2% in 2025.

Investors took fright, sending the stock down as much as 150p ($2) or close to 20% in early trading to as low as 620p ($7.9), the lowest level since 2020 during the pandemic. That valued the group at around £7 billion ($8.8 billion). The share price decline eased to about 16% as trading continued.

Mark Read, the chief executive of WPP since 2018, admitted to Campaign it had been “a tough year” in terms of growth, although he pointed out revenues from the top 25 clients increased by 2%.

The final three months of 2024 were especially brutal for the creative agencies, which tumbled 6.5%, partly because of “weaker client discretionary spend than is typically seen in the final quarter”.

Over the course of 2024, the creative agencies, which include VML, Ogilvy, Hogarth and AKQA, declined 3.9%.

WPP pointed to “the impact of the 2023 loss of assignments with a large healthcare client”—thought to be Pfizer—“and a challenging trading environment in China”.

Hogarth was one bright spot, growing mid-single digits, but there was no word on the revenue performance of flagship agencies VML and Ogilvy.

Digital shop AKQA suffered a decline in the low “double digits” as “spend on project-based work remained weak throughout the year”.

WPP took a £237 million ($300 million) impairment, “primarily” because of AKQA, whose founder and chief executive, Ajaz Ahmed, departed in 2024 after 30 years—along with a number of senior managers.

Group M, the media-buying division, grew 2.4% in Q4 and 2.7% across the full year, helped by retentions and wins including Unilever and Amazon in the second half of 2024.

However, Read told an investor presentation that Group M needed to perform better. “To be frank, we have not realised our full potential for the last 18 to 24 months,” he said, before inviting Brian Lesser, the new global chief executive of Group M, to lay out his strategy in the presentation at WPP’s Sea Containers HQ in London.

Lesser’s priorities included using artificial intelligence to drive data and the introduction of new proprietary media trading products.

WPP struggled in many of its key markets. North America declined 0.7%, Germany dropped 1% and the UK fell 2.7%.

The UK had a particularly tough Q4, with revenues slumping 5.1% “with further weakness in project-based work across creative and specialist agencies exacerbated by an uncertain macro outlook, only partially offset by growth in Group M and Ogilvy”.

Leaving aside Germany, the biggest market in western continental Europe, the rest of the region was up 1.7% as France, Spain and Italy all grew during 2024. India grew 2.8% but China, where Group M has been under pressure, declined 20.8%.

In a further sign of the financial pressure on WPP, the British group’s headcount dropped by 6,100 to 108,044 at the end of 2024 compared to 114,173 a year earlier, although the company did sell its corporate PR operation, FGS, in the period.

Read said WPP was making “significant progress against our strategy”, after internal mergers to create VML and Burson and simplification of Group M.

“The actions we are taking across WPP will strengthen our existing client relationships and drive our new business results,” he said. “We expect some improvement in the performance of our integrated creative agencies in the year ahead. At the same time, we have comprehensive efforts underway to improve our competitive positioning through new leadership at Group M, with further investment in AI, data and proprietary media.”

He added he was “cautious given the overall macro environment”.

WPP, with a 1% decline, was the last of the big four groups to report annual revenues. Publicis Groupe increased organic revenues by 5.8%, Omnicom grew 5.2% (although it does not deduct pass-through costs) and Interpublic was up 0.2%.

Publicis had net revenues of €13.97 billion ($14.4 billion) and WPP’s results were confirmation that the French group has overtaken its British rivals to become the biggest agency group on a net revenue basis.

Omnicom’s planned takeover of Interpublic, which is due to complete later in 2025, would likely mean it becomes the biggest group.